United States Court of Appeals,
Eleventh Circuit.
No. 94-8335.
Poleon GRIFFIN; Nathaniel Solomon; Jackie Moody, and All Others
Similarly Situated, Plaintiffs-Appellants,
William Harrell, Plaintiff,
v.
KRAFT GENERAL FOODS, INC., d/b/a Kraft USA, and KGF Severance Pay
Plan for Hourly Non-Union Employees, Defendants-Appellees.
Aug. 28, 1995.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:93-cv-1333-RLV), Robert L. Vining, Jr.,
Chief Judge.
Before HATCHETT and COX, Circuit Judges, and JOHNSON, Senior
Circuit Judge.
PER CURIAM:
Poleon Griffin, Nathaniel Solomon, William Harrell, and Jackie
Moody (collectively "the plaintiffs") sued Kraft General Foods,
Inc., ("KGF") and the KGF Severance Pay Plan for Hourly Non-Union
Employees ("the Plan"),1 seeking to invalidate the general releases
in favor of KGF that the Plan required the plaintiffs to sign in
order to receive severance benefits. The plaintiffs claim that
they did not waive their rights under the Age Discrimination in
Employment Act "knowingly and voluntarily," as defined by the Older
Workers Benefit Protection Act (OWBPA) § 201, 29 U.S.C. § 626(f)
(Supp. V 1993). The district court granted KGF summary judgment,
and the plaintiffs appeal. We reverse and remand.
I. Background
1
For the sake of convenience, we refer to the defendants
collectively as "KGF."
The parties essentially agree on the facts. KGF decided to
close its Decatur, Georgia grocery products plant as part of a
downsizing to eliminate excess production capacity. Four other KGF
plants manufactured most of the same food products as the Decatur
plant. To assist laid-off workers in their transition to other
employment, KGF created the Plan. The Plan provides workers with
continuing health benefits and severance pay in an amount
determined by length of service.
The Plan's benefits were conditioned on each employee's
execution of a general release. The release explicitly included a
waiver of all rights under the Age Discrimination in Employment Act
(ADEA), 29 U.S.C. §§ 621-634. KGF began to distribute the release
forms around May 17, 1993. The plant manager informed employees in
a memorandum accompanying the release that they had a maximum of
forty-five days to consider and sign the releases in order to be
eligible for Plan benefits. On June 2, however, the personnel
manager issued a memorandum to the employees who would be
terminated on June 25, indicating that they would have to return
the executed release by June 4 in order to receive their severance
pay on their last day of work. The explanation accompanying the
releases also gave the ages and job titles of all the Decatur
employees who would be laid off and hence were eligible for Plan
benefits. KGF provided no age data regarding employees who were
not eligible for Plan benefits.
The plaintiffs sued KGF to enjoin it from requiring releases
from the employees who had not yet signed them2 and to void the
3
releases of the employees who had signed. The plaintiffs
challenged the validity of the releases on several grounds. First,
they claimed that their waivers of ADEA rights were not "knowing
and voluntary" and were therefore invalid under the OWBPA. They
also asserted that the waivers violate the public policy behind
ERISA, and public policy in general. The district court granted
KGF summary judgment on all claims, and the plaintiffs appeal.
II. Issues and Standard of Review
The plaintiffs raise three issues requiring discussion.4
First, the employees challenge the district court's holding that
their waivers of ADEA rights were "knowing and voluntary" under
OWBPA § 201(f)(1)(H)(ii), 29 U.S.C. § 626(f)(1)(H)(ii), despite
KGF's failure to provide the plaintiffs with the ages of retained
employees in the "same job classification or organizational unit"
at other KGF plants. Second, the plaintiffs contend that the
district court erroneously failed to consider circumstances not
mentioned in the OWBPA that render the waiver of their ADEA rights
2
According to the plaintiffs' uncontroverted representation
in their brief, all employees have now signed the release.
3
Although the plaintiffs applied for class certification in
their complaint, to date no class has been certified.
4
In addition to the issues listed in the text, the
plaintiffs challenge the district court's holding that
conditioning Plan eligibility on waiver of ERISA rights does not
violate public policy. Second, they claim error in the district
court's determination that the release did not require them to
waive any claims that would arise in the future. Third, the
plaintiffs challenge the district court's conclusion that KGF did
not, as the OWBPA requires, provide them with at least forty-five
days to consider the waiver. We find no reversible error in the
district court's resolution of these issues.
not knowing and voluntary. Finally, the plaintiffs maintain that
the district court incorrectly concluded that the required waiver
of ADEA rights did not violate the ADEA even though KGF provided
ADEA-protected employees no more consideration than
non-ADEA-protected employees.
We review summary judgments de novo, applying the same
standard as the district court. Fane v. Edenfield, 945 F.2d 1514,
1516 (11th Cir.1991). Summary judgment is appropriate when there
is no genuine issue of material fact, and the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The
moving party, here KGF, bears the burden of showing that there is
no issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,
325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986).
III. Discussion
A. Whether the ADEA Waiver Was "Knowing and Voluntary" Under
the OWBPA
1. "Group or Class" Termination Information Requirement
Section 201 of the OWBPA prohibits waiver of ADEA rights if
the waiver is not "knowing and voluntary." 29 U.S.C. § 626(f)(1).
The statute provides that an ADEA waiver is not "knowing and
voluntary" unless the party that requested the waiver has met
several requirements. Id. § 626(f)(1)(A)-(H). Pursuant to one
requirement, waivers "requested in connection with an exit
incentive or other employment termination program offered to a
group or class of employees" are not knowing and voluntary unless
(H) ... the employer (at the commencement of the period
specified in subparagraph (F)) informs the individual in
writing in a manner calculated to be understood by the average
individual eligible to participate, as to-
....
(ii) the job titles and ages of all individuals eligible
or selected for the program, and the ages of all
individuals in the same job classification or
organizational unit who are not eligible or selected for
the program.
Id. § 626(f)(1)(H)(ii). The party asserting the validity of the
waiver (in this case, KGF) has the burden of showing that the
waiver was knowing and voluntary. Id. § 626(f)(3).
The parties agree that the closure of the Decatur plant
entailed the termination of a "group or class of employees," and
that KGF provided the employees with the "job titles and ages of
all individuals eligible" for the Plan. Thus, the central
substantive issue is whether KGF satisfied the second half of §
626(f)(1)(H)(ii)'s informational requirement in requesting the
waivers. In the context of KGF's motion for summary judgment, to
prevail KGF must show that no issue of material fact remains as to
whether KGF provided the Decatur workers the ages of all
individuals in the same "job classification or organizational unit"
who were not eligible for the Plan's severance benefits.
The employees and amicus curiae American Association of
Retired Persons contend that § 626(f)(1)(H)(ii)'s language imposes
a requirement to provide comparative information to the employees
so that they may assess the possibility of age discrimination.
This comparative information must, they assert, include the ages of
employees at other plants that are not closed when, as here, the
company may have considered for closure several plants producing
similar products, and employees at other plants may assume the
functions of the Decatur employees in making these food products.
Thus, they conclude, KGF is not entitled to judgment as a matter of
law.
KGF and amicus curiae Equal Employment Advisory Council (EEAC)
counter, and the district court held, that as a matter of law there
are no "individuals in the same job classification or
organizational unit who are not eligible or selected for the
program" whose ages KGF can provide when the group or class
termination arises from the closing of an entire plant. Thus, they
conclude, KGF merits summary judgment even though it offered no
evidence as to the job classifications or organizational units that
employed the plaintiffs.5
We agree with the plaintiffs. To our knowledge, it is an
issue of first impression whether "individuals in the same job
classification or organizational unit" can include employees
outside a single facility. Statutory construction begins with the
5
KGF also contends, in effect, that (H)(ii) in fact does not
have a second half. In support of this view, KGF argues that the
statutory category of employees who are "not eligible" for the
Plan does not include employees who are "not covered" by the
Plan. Employees who were not laid off, KGF continues, were "not
covered" by the Plan. Thus, KGF concludes, "KGF supplied
age-related data as to all employees covered by and "eligible' to
participate in the Plan, thereby complying with subsection
(H)(ii)." (Appellee's Br. at 28.) We are unpersuaded. If there
is indeed a meaningful difference between not being eligible for
an ERISA plan and not being covered by it, we find no basis for
drawing that distinction in (H)(ii).
Furthermore, we observe that according to the terms
used in the summary plan description, any "regular, active,
full-time, hourly non-union employee of KGF or any of its
operating groups or subsidiaries working in the U.S." is
"covered" by the termination plan. (R1-1-Exh. A at 3.)
Under the Plan, a worker becomes "eligible" when employment
is terminated due to a "permanent shutdown of a facility."
(Id. at 4.) Thus, it appears that the Plan itself would
consider retained employees at other grocery product plants
to be "covered," but not "eligible."
words of the statute itself, Norfolk & W. Ry. v. American Train
Dispatchers Ass'n, 499 U.S. 117, 127-29, 111 S.Ct. 1156, 1163, 113
L.Ed.2d 95 (1991), and the statutory language supports the
plaintiffs' argument. Neither "job classification" nor
"organizational unit" is defined, but neither phrase naturally
includes only the employees at a single plant. Given the myriad
organizational structures of the business world, it is easy to
conceive of a unit that would span more than one plant. Likewise,
employees at the company's other plants may perform the same jobs,
at identical levels in the hierarchy, making the same products, for
pay similar to the Decatur employees'. Furthermore, the statute
does not in any other way limit the informational requirement to
the ages of a single plant's noneligible employees. Plant closures
are not excluded from "group or class" terminations, and the
statute does not except plant closings from its conditions for
knowing and voluntary waiver. Thus, to limit individuals in the
same "job classification or organizational unit" to a single plant
would be to read the statute's words contrary to their naturally
broad meaning and to insert an exception where none is written.6
6
The EEAC urges us to interpret a change in the Act's
language before passage to imply that individuals in the same
"job classification or organizational unit" cannot work outside a
single plant or facility. The original bill reported by the
Senate Labor and Human Resources Committee had in place of "job
classification or organizational unit" the language "plant,
facility, or organizational unit." S. 1511, 101st Cong., 2d
Sess. § 201 (1990). The EEAC asserts that the unexplained
replacement of "plant, facility" with "job classification" shows
that Congress preferred a construction limiting "job
classifications" to those in a single plant. We are not
persuaded. If anything, the change from the concrete "plant,
facility" to the abstract "job classification" suggests that
Congress preferred a more open-ended reading of the statute that
would take into account a variety of company structures.
This interpretation comports with the provision's purpose as
expressed in the legislative history. The Senate Labor and Human
Resources Committee, which approved the ultimate version of the
OWBPA, stated that the purpose of § 626(f)(1)(H)(ii) was to "permit
older workers to make more informed decisions in group termination
and exit incentive programs." S.Rep. No. 263, 101st Cong., 2d
Sess. 34 (1990), reprinted in 1990 U.S.C.C.A.N. 1509, 1539.
Without legislation, the Committee found, older workers in group or
class terminations are generally unable "to determine whether the
[termination] program gives rise to a valid claim under the ADEA."
Id. This inability arises because
employees affected by [group or class termination] programs
have little or no basis to suspect that action is being taken
based on their individual characteristics. Indeed, the
employer generally advises them that the termination is not a
function of their individual status. Under these
circumstances, the need for adequate information and access to
advice before waivers are signed is especially acute.
Id. at 1538 (emphasis in original). These concerns are no less
valid in the plant closing context than in other group or class
terminations. Thus, we conclude that individuals in the same "job
classification or organizational unit" may include employees at
other plants in the same company.
Therefore, whether there are in fact other individuals in the
plaintiffs' "job classification or organizational unit" who were
not eligible for Plan benefits is, in this case, not an issue of
law but one of fact to be determined in light of §
626(f)(1)(H)(ii)'s purpose. In moving for summary judgment, KGF
presented no evidence to show that this issue of fact is not in
dispute. Indeed, we cannot ascertain from the record what the
plaintiffs' job titles or responsibilities were, let alone what KGF
job classifications or organizational units are relevant in light
of the provision's purpose of providing older employees with
information that permits them better to evaluate any ADEA claims.
Not having carried its burden, KGF is not entitled to summary
judgment as to this issue.
2. Nonstatutory Factors Showing That the Waiver Was Not
"Knowing and Voluntary"
The employees contend that the district court should have
considered the "totality of the circumstances," in addition to the
explicit OWBPA requirements, to determine if their waiver of ADEA
rights was "knowing and voluntary." Prior to the OWBPA's
enactment, a federal common-law rule based on the ADEA had emerged
permitting ADEA waivers only if they were knowing and voluntary, as
determined by an open-ended list of factors. E.g., Gormin v.
Brown-Forman Corp., 963 F.2d 323, 327 (11th Cir.1992); Runyan v.
National Cash Register Corp., 787 F.2d 1039, 1044 (6th Cir.1986).
The OWBPA's language and legislative history strongly support the
plaintiffs' contention that the nonstatutory circumstances
considered in these cases survive the enactment of the OWBPA. The
statute provides that "a waiver may not be considered knowing and
voluntary unless at a minimum " the employer has complied with the
statutory requirements. 29 U.S.C. § 626(f)(1) (emphasis added).
Furthermore, the legislative history explicitly approves of an
interpretation that the statutory requirements are not exclusive.
Title II of the [OWBPA] provides ... that waivers not
supervised by the EEOC may be valid and enforceable if they
meet certain threshold requirements and are otherwise shown to
be knowing and voluntary....
... The individual [waiving his rights] ... must have
acted in the absence of fraud, duress, coercion, or mistake of
material fact. The Committee expects that courts reviewing
the "knowing and voluntary" issue will scrutinize carefully
the complete circumstances in which the waiver was executed.
S.Rep. No. 263, 101st Cong., 2d Sess. 31-32 (1990), reprinted in
1990 U.S.C.C.A.N. 1509, 1537 (emphasis added). Accordingly, we
hold that nonstatutory circumstances, such as fraud, duress, or
coercion in connection with the execution of the waiver, may render
an ADEA waiver not "knowing and voluntary."
Although the employees argued before the district court that
it should consider a number of nonstatutory factors, the district
court did not do so. We therefore leave it for the district court
to consider on remand whether under the totality of the
circumstances the waiver was valid.
B. Lack of Additional Consideration for ADEA-Protected
Employees
The plaintiffs also argue that the Plan's requirement of ADEA
waiver constitutes disparate treatment under the ADEA, 29 U.S.C. §
623(a)(1), because ADEA-protected employees received no additional
consideration for waiving their ADEA claims, which younger workers
lack. The employees rely exclusively on Dibiase v. SmithKline
Beecham Corp., 847 F.Supp. 341 (E.D.Pa.1994), which held that a
plan that required a general release in exchange for enhanced
benefits discriminated against ADEA-protected workers because it
did not provide ADEA-protected workers with additional
consideration. Id. at 348. Since the parties filed their briefs
in this case, the Third Circuit has reversed the Eastern District
of Pennsylvania. DiBiase v. SmithKline Beecham Corp., 48 F.3d 719
(3d Cir.1995).
The Third Circuit concluded that a plan that conditioned
enhanced benefits on the execution of releases, but provided no
additional consideration to ADEA-protected workers, did not violate
the ADEA. Id. The court reasoned that such a plan is not facially
discriminatory, because the plan itself does not distinguish
between older and younger workers; rather, the ADEA makes that
distinction. Id. at 727. Furthermore, the fact that the employer
required older employees to waive ADEA rights, as well as other
rights, did not constitute disparate treatment. That an older
employee has a right, the court reasoned, does not necessarily mean
that the older employee has a claim. Therefore, older workers may
or may not be waiving more valuable rights than younger workers.
Id. at 728-29.
We find the Third Circuit's reasoning persuasive and therefore
reject the plaintiffs' contention that the Plan violates the ADEA.
IV. Conclusion
For the foregoing reasons, we VACATE the summary judgment for
the defendants and REMAND to the district court with instructions
to enter partial summary judgment in favor of the defendants on all
claims except those that the ADEA waiver was invalid pursuant to 29
U.S.C. § 626(f)(1)(H)(ii) and that the waiver was invalid in light
of circumstances not enumerated in 29 U.S.C. § 626(f).
VACATED AND REMANDED WITH INSTRUCTIONS.